While not the same engine, my '96 1.0 3-cyl had/has a P0420 code being thrown. The PO high-centered it in a snow-bank and wrecked the exhaust system. He did replace the exhaust from the CAT back before he sold it to me (not the CAT though).
I was getting the P0420 about every dozen or so times I drove the car, which I would clear with my OBD-II code reader. The only time it appeared to be resolved (for several months) was after I replaced the spark plugs. Then it came back.
I suspect a small exhaust leak before the last (2nd) Oxygen sensor in the system or that the 2nd sensor is bad.
There are a few things to consider here, before replacing the CAT:
http://www.obd-codes.com/trouble_cod...old-bank-1.php
-Mike